Big 5 Sporting Goods Corporation (Nasdaq: BGFV) (the “Company”), a
leading sporting goods retailer, today reported financial results
for the fiscal 2019 third quarter ended September 29, 2019.
Net sales for the fiscal 2019 third quarter were
$266.2 million, compared to net sales of $266.4 million for the
third quarter of fiscal 2018. Same store sales increased 0.3%
for the third quarter of fiscal 2019, which represents the
Company’s fourth consecutive quarter of positive same-store
sales.
Gross profit for the fiscal 2019 third quarter
was $86.0 million, compared to $82.5 million in the third quarter
of the prior year. The Company’s gross profit margin was
32.3% in the fiscal 2019 third quarter, versus 31.0% in the third
quarter of the prior year.
Selling and administrative expense as a
percentage of net sales was 28.9% in the fiscal 2019 third quarter
versus 29.2% in the third quarter of the prior year. Overall
selling and administrative expense for the quarter decreased $0.8
million from the prior year.
Net income for the third quarter of fiscal 2019
was $6.4 million, or $0.30 per diluted share, compared to net
income for the third quarter of fiscal 2018 of $3.1 million, or
$0.15 per diluted share.
For the 39-week period ended September 29, 2019,
net sales increased to $752.4 million from net sales of $740.5
million in the first 39 weeks of last year. Same store sales
increased 1.8% in the first 39 weeks of fiscal 2019 versus the
comparable period last year. Net income for the first 39
weeks of fiscal 2019 was $8.1 million, or $0.38 per diluted share,
including a $0.02 per diluted share charge for the write-off of
deferred tax assets related to share-based compensation, compared
to net income for the first 39 weeks of fiscal 2018 of $1.6
million, or $0.07 per diluted share, including a $0.01 per diluted
share charge for the write-off of deferred tax assets related to
share-based compensation.
Operating cash flow for the 2019 fiscal
year-to-date period was a positive $13.7 million, compared to a
negative $8.1 million in the prior year period. This $21.7
million improvement in operating cash flow contributed to reduced
revolving credit borrowings year-over-year, with $60.6 million in
borrowings at quarter-end, reflecting a $22.9 million or 27%
improvement versus the prior year.
“With our fourth consecutive quarter of
same-store sales growth, we delivered earnings significantly ahead
of our guidance and double the prior year’s third quarter
earnings,” said Steven G. Miller, the Company’s Chairman, President
and Chief Executive Officer. “A huge contributor to the
strong earnings performance was the 94 basis-point expansion of our
merchandise margins, which marked our strongest margin performance
of any third quarter since we became a publicly traded company in
2002. The increase reflects a shift in sales mix toward
higher-margin products along with the successful impact of our
efforts to optimize pricing and promotions.”
Mr. Miller continued, “Our fourth quarter is off
to a solid start, with our year-over-year sales and merchandise
margin trends accelerating from the third quarter. October is a
very low volume period for our business, and as always, the keys to
the fourth quarter will be the holiday period and the start of the
winter selling season across our markets. We feel well
positioned from a promotional standpoint for the holiday season and
believe that our fresh seasonal inventory will resonate well with
our customers when winter weather arrives.”
Quarterly Cash Dividend The
Company's Board of Directors has declared a quarterly cash dividend
of $0.05 per share of outstanding common stock, which will be paid
on December 13, 2019, to stockholders of record as of November 29,
2019.
GuidanceFor the fiscal 2019
fourth quarter, the Company expects same store sales to be in the
positive low single-digit range and expects to realize a loss per
share in the range of $0.04 to $0.16, compared to a same store
sales increase of 1.1% and a loss per share of $0.24, including
$0.08 per share of charges primarily related to asset impairment
and contract termination costs, in the fourth quarter of fiscal
2018. Fiscal 2019 fourth quarter earnings guidance reflects
an expectation for continued merchandise margin expansion over the
prior year period. Given the Company’s fourth quarter
guidance, the Company expects fiscal 2019 full year earnings to be
in the range of $0.22 to $0.34 per diluted share.
Store OpeningsDuring the third
quarter of fiscal 2019, the Company closed one store. During
the fiscal 2019 fourth quarter, the Company anticipates opening two
stores, including the relocation of one store that closed during
the quarter. For the fiscal 2019 full year, the Company
anticipates opening three stores and closing five stores, including
one relocation.
Conference Call InformationThe
Company will host a conference call and audio webcast today,
October 29, 2019, at 2:00 p.m. Pacific (5:00 p.m. ET), to discuss
financial results for the third quarter of fiscal 2019. To
access the conference call, participants in North America should
dial (877) 407-9039, and international participants should dial
(201) 689-8470. Participants are encouraged to dial in to the
conference call ten minutes prior to the scheduled start
time. The call will also be broadcast live over the Internet
and accessible through the Company’s website at
www.big5sportinggoods.com. Visitors to the website should
select the “Investor Relations” link to access the webcast.
The webcast will be archived and accessible on the same website for
30 days following the call. A telephonic replay will be
available through November 5, 2019 by calling (844) 512-2921 to
access the playback; the passcode is 13695834.
About Big 5 Sporting Goods
Corporation Big 5 is a leading sporting goods retailer in
the western United States, operating 433 stores under the “Big 5
Sporting Goods” name as of the fiscal quarter ended September 29,
2019. Big 5 provides a full-line product offering in a
traditional sporting goods store format that averages 11,000 square
feet. Big 5’s product mix includes athletic shoes, apparel
and accessories, as well as a broad selection of outdoor and
athletic equipment for team sports, fitness, camping, hunting,
fishing, tennis, golf, winter and summer recreation and roller
sports.
Except for historical information contained
herein, the statements in this release are forward-looking and made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements involve
known and unknown risks and uncertainties and other factors that
may cause Big 5’s actual results in current or future periods to
differ materially from forecasted results. These risks and
uncertainties include, among other things, changes in the consumer
spending environment, fluctuations in consumer holiday spending
patterns, increased competition from e-commerce retailers, breach
of data security or other unauthorized disclosure of sensitive
personal or confidential information, the competitive environment
in the sporting goods industry in general and in Big 5’s specific
market areas, inflation, product availability and growth
opportunities, changes in the current market for (or regulation of)
firearm-related products, disruption in product flow, seasonal
fluctuations, weather conditions, changes in cost of goods,
operating expense fluctuations, increases in labor and
benefit-related expense, changes in laws or regulations, including
those related to tariffs and duties, lower than expected
profitability of Big 5’s e-commerce platform or cannibalization of
sales from Big 5’s existing store base which could occur as a
result of operating the e-commerce platform, litigation risks,
stockholder campaigns and proxy contests, risks related to Big 5’s
leveraged financial condition, changes in interest rates, credit
availability, higher expense associated with sources of credit
resulting from uncertainty in financial markets and economic
conditions in general. Those and other risks and uncertainties are
more fully described in Big 5’s filings with the Securities and
Exchange Commission, including its Annual Reports on Form 10-K and
Quarterly Reports on Form 10-Q. Big 5 conducts its business in a
highly competitive and rapidly changing environment. Accordingly,
new risk factors may arise. It is not possible for management to
predict all such risk factors, nor to assess the impact of all such
risk factors on Big 5’s business or the extent to which any
individual risk factor, or combination of factors, may cause
results to differ materially from those contained in any
forward-looking statement. Big 5 undertakes no obligation to revise
or update any forward-looking statement that may be made from time
to time by it or on its behalf.
FINANCIAL TABLES FOLLOW
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BIG 5
SPORTING GOODS CORPORATION |
|
CONDENSED
CONSOLIDATED BALANCE SHEETS |
|
(Unaudited) |
|
|
(In thousands,
except share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
September 29, 2019 |
|
December 30, 2018 |
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
Cash |
$ |
5,042 |
$ |
6,765 |
|
|
Accounts receivable, net of allowances of $34 and $28,
respectively |
|
10,332 |
|
14,184 |
|
|
Merchandise inventories, net |
|
310,514 |
|
294,900 |
|
|
Prepaid expenses |
|
8,395 |
|
9,224 |
|
|
Total current assets |
|
334,283 |
|
325,073 |
|
|
|
|
|
|
|
|
|
Operating
lease right-of-use assets, net |
|
270,363 |
|
— |
|
|
Property and
equipment, net |
|
70,524 |
|
76,488 |
|
|
Deferred
income taxes |
|
13,930 |
|
14,543 |
|
|
Other
assets, net of accumulated amortization of $1,968 and $1,772,
respectively |
|
3,725 |
|
3,457 |
|
|
Total assets |
$ |
692,825 |
$ |
419,561 |
|
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
Accounts payable |
$ |
90,375 |
$ |
80,613 |
|
|
Accrued expenses |
|
59,653 |
|
67,659 |
|
|
Current portion of operating lease liabilities |
|
66,673 |
|
— |
|
|
Current portion of finance lease liabilities |
|
2,546 |
|
2,322 |
|
|
Total current liabilities |
|
219,247 |
|
150,594 |
|
|
|
|
|
|
|
|
|
Operating
lease liabilities, less current portion |
|
219,474 |
|
— |
|
|
Finance
lease liabilities, less current portion |
|
4,710 |
|
4,823 |
|
|
Long-term
debt |
|
60,642 |
|
65,000 |
|
|
Deferred
rent, less current portion |
|
— |
|
14,615 |
|
|
Other
long-term liabilities |
|
8,108 |
|
9,668 |
|
|
Total liabilities |
|
512,181 |
|
244,700 |
|
|
|
|
|
|
|
|
|
Commitments
and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity: |
|
|
|
|
|
|
Common stock, $0.01 par value, authorized 50,000,000 shares;
issued 25,321,899 and |
|
|
|
|
|
25,074,307 shares, respectively; outstanding 21,671,686 and
21,424,094 shares, respectively |
|
253 |
|
250 |
|
|
Additional paid-in capital |
|
119,602 |
|
118,351 |
|
|
Retained earnings (1) |
|
103,316 |
|
98,787 |
|
|
Less: Treasury stock, at cost; 3,650,213 shares |
|
(42,527) |
|
(42,527) |
|
|
Total stockholders' equity |
|
180,644 |
|
174,861 |
|
|
Total liabilities and stockholders' equity |
$ |
692,825 |
$ |
419,561 |
|
|
|
|
|
|
|
|
|
(1) In the first quarter of fiscal 2019, the
Company recorded an after-tax decrease to beginning retained
earnings of $0.3 million for a change in accounting principle
related to leases.
BIG 5
SPORTING GOODS CORPORATION |
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS |
|
(Unaudited) |
|
(In thousands,
except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 Weeks Ended |
|
39 Weeks Ended |
|
|
|
September 29, 2019 |
|
September 30, 2018 |
|
September 29, 2019 |
|
September 30, 2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales |
$ |
266,150 |
$ |
266,351 |
$ |
752,401 |
$ |
740,480 |
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales |
|
180,158 |
|
183,852 |
|
517,416 |
|
509,984 |
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
85,992 |
|
82,499 |
|
234,985 |
|
230,496 |
|
|
|
|
|
|
|
|
|
|
|
Selling and
administrative expense (1) |
|
76,886 |
|
77,680 |
|
221,676 |
|
225,824 |
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
9,106 |
|
4,819 |
|
13,309 |
|
4,672 |
|
|
|
|
|
|
|
|
|
|
|
Interest
expense |
|
683 |
|
860 |
|
2,197 |
|
2,309 |
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
8,423 |
|
3,959 |
|
11,112 |
|
2,363 |
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense (2) |
|
2,026 |
|
844 |
|
3,023 |
|
805 |
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
6,397 |
$ |
3,115 |
$ |
8,089 |
$ |
1,558 |
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share (1)(2): |
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.30 |
$ |
0.15 |
$ |
0.38 |
$ |
0.07 |
|
Diluted |
$ |
0.30 |
$ |
0.15 |
$ |
0.38 |
$ |
0.07 |
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares of common stock outstanding: |
|
|
|
|
|
|
|
|
|
Basic |
|
21,132 |
|
20,990 |
|
21,093 |
|
20,972 |
|
Diluted |
|
21,154 |
|
21,000 |
|
21,125 |
|
21,021 |
|
|
|
|
|
|
|
|
|
|
|
(1) In the second quarter of fiscal 2019, the Company recorded a
favorable settlement of $1.1 million, or $0.03 per diluted share,
related to the termination of a software contract.
(2) In the first nine months of fiscal 2019 and 2018, the
Company recorded charges of $0.4 million, or $0.02 per diluted
share, and $0.2 million, or $0.01 per diluted share, respectively,
to write-off deferred tax assets related to share-based
compensation.
Contact:
Big 5 Sporting Goods
Corporation
Barry EmersonSr. Vice President and Chief Financial Officer(310)
536-0611
ICR, Inc.John MillsManaging Partner(646) 277-1254
Big 5 Sporting Goods (NASDAQ:BGFV)
Historical Stock Chart
From Aug 2024 to Sep 2024
Big 5 Sporting Goods (NASDAQ:BGFV)
Historical Stock Chart
From Sep 2023 to Sep 2024